Tom Coburn to Force Senate to Vote On Ethanol Subsidies

Will the “Get Government Out of the Business of Running Businesses” Crowd Vote to “Get Government Out of the Business of Running Businesses.

Senator Tom Coburn, (R, Ok) has apparently found a way around the legislative hurdles that prevent the Senate from even voting on an issue and will force the Senate to vote on ending Government subsidies for the Ethanol industry.  Now The Dismal Political Economist does not agree with almost all of the political positions of Sen. Coburn, but he respects the Senator as principled Conservative.

Ethanol is made by distilling corn into alcohol.  The impetus started as a home grown replacement for imported oil, when corn prices were depressed.  The Dismal Political Economist had no problem with the initial Federal support for the industry, a 45 cent tax credit and a 54% tariff to protect the U. S. from imports while the industry got started.  This type of policy is what Economists call an “Infant Industry Support”, and is designed to get industries started by temporarily providing government aid and market protection.  The idea is that once the industry is well established, it can survive on its own and the Federal economic support can be withdrawn.  As Federal economic policies go, it is not a bad policy when properly applied.

The industry is now established, and furthermore corn prices have risen to very high levels.  The economic justification for taxpayer support has gone away, and the idea of taking a food product and turning it into gasoline while hunger is still prevalent has problems of its own.  Of course, as normally happens in Washington, once a subsidy, always a subsidy.  Farm state legislators oppose taking away the candy from the corn growers, and this attitude crosses all party and political philosophy lines.

One potential Republican Presidential candidate came out against the subsidies, thus endangering his electoral chances by committing a cardinal sin of politics, supporting principles over votes.

The Senate vote is expected on Tuesday, and The Dismal Political Economist will report then on whether or not the “end subsidies for the rich” and the “let’s fight the deficit” and the “government has not business in business” crowd walks the walk or just talks the talk.